New Department of Labor e-Disclosure Rules

Since 2002, plan sponsors have been able to electronically furnish plan information and notices in relation to qualified retirement plans; however, electronic distribution was only allowable if the employee gave consent to agree to receive electronic communications. Also, if an employer determined electronic distribution was allowable on the basis of all employees having access to e-communications or email during an integral part of their work day.

Recognizing the common use of the internet, the DOL has released new e-disclosure regulations which no longer require a participant to opt in to receiving e-delivery of retirement plan information and disclosures, nor does the employee have to interact with electronic communications as part of their job. Therefore, unless the recipient opts-out of e-delivery of retirement plan information, employers may begin to provide documents such as the annual participant fee disclosure, automatic enrollment notice and qualified default investment alternative electronically. The deadlines to provide notices or retirement plan information did not change.

Prior to the first electronic delivery of retirement plan information, an initial paper mailing notification must be sent to participants, beneficiaries and alternate payees making them aware of the electronic distribution of retirement plan information. Recipients may opt-out of the electronic format and request a continuation of paper notices. This initial notification will state the email address(es) to be used and access instructions to where the document will be posted. Further, this initial notification will inform recipients of the one-year retention period of the document on the website, or in some cases longer, until the document is replaced. Additionally, there will be information on how the recipient may request a paper copy of the document free of charge, and how to stop e-disclosures and elect to receive all documents in paper format going forward. In the future, after implementing electronic delivery, this initial notice should be provided to all newly hired employees.

In the future, a Notice of Internet Availability will be sent alerting recipients that important information about their retirement plan is available for them to review. This Notice of Internet Availability will also contain the document name, a brief description and directions on how to access the website where the document is housed. As in the initial notice, directions will be provided on how to obtain a paper copy, stop e-delivery of plan information, how long the document will be available on the website and how to contact the plan administrator.

Over the coming months, Greenleaf Trust will be updating system programming and defining new processes prior to moving to delivering notices per the new e-disclosure rules. As with any new direction, decisions need to be made, data analyzed and processes defined prior to the rollout.